What to Consider When Planning a Micro-retirement

by Natasya Grisella

Mon, 18-August-2025

Younger generations are challenging the idea of a traditional retirement. Instead of waiting until the end of their careers to take time off, many are choosing to take intentional breaks between jobs or projects. A micro-retirement gives you the chance to reset, recharge, and rediscover what matters most to you.

However, stepping away from work takes planning. It is important to have a solid financial plan to cover your expenses and protect what you’re working hard to build.

The “why” before “how”

Before planning for a micro-retirement, take a moment to get clear on why you want to take this break. Understanding your “why” will help you set realistic goals and plan for your return to work. Not only will this help you understand what a successful break looks like for you, but it will also guide important decisions like how long you will be away, how much money you will need, and what insurance or coverage is necessary.

Having a clear plan based on your goals will give you peace of mind throughout your micro-retirement. It will also help you navigate unexpected roadblocks and keep your finances in order.

Things to consider before your micro-retirement

Regardless of what you want to achieve during your micro-retirement, there are a few key considerations to keep in mind for a successful break:

1. Build a dedicated savings plan

Set aside enough savings to cover your living expenses throughout your micro-retirement. Keep in mind that you might spend more money than you think as you have more time on your hands. It may also be helpful to include a buffer for unexpected costs to avoid financial stress.

2. Review your insurance needs

Leaving your job may mean losing your employee benefits. Make sure to review your current coverage and arrange replacements for health, dental, life, and disability insurance if needed.

If you plan to travel during your micro-retirement, remember to get travel insurance before you depart on your trip. This will protect you from emergency medical costs and other unexpected events that can quickly add up.

3. Understand the tax impact

If you expect little to no income during your micro-retirement, you may have opportunities to reduce your overall taxes. Consider contributing to your RRSP during high-income years to take advantage of tax deductions and withdraw your funds during lower-income years, such as micro-retirement to pay less tax on the money you take out.

Additionally, if you continue to earn some income through part-time or freelance work, it is important to understand which business deductions can apply to you and how this will affect your taxes. Planning ahead with a tax professional can help you make informed decisions during tax season.

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Key Takeaways

Micro-retirements are challenging the idea of a traditional retirement. These six-to-twelve-month breaks offer many people the chance to step back and recharge in the middle of their careers.

However, it is important to understand your “why” and create a financial plan before taking a break. This will help prepare financial and insurance needs to ensure you are protected during your micro-retirement.

If you are considering a micro-retirement, we encourage you to connect with a financial advisor to help you develop a plan based on your situation and goals.

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What to Consider When Planning a Micro-retirement

The “why” before “how”

Things to consider before your micro-retirement

1. Build a dedicated savings plan

2. Review your insurance needs

3. Understand the tax impact

Key Takeaways

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